Tuesday, September 01, 2009

Making Money in Alternative Energy Means Thinking Japanese


Raymond Meier
At Gozanoishi Shrine on Lake Tazawa, in Japan's Akita Prefecture.

Colorado power utilityXcel Energy Inc. (XEL) is among the leading U.S. developers of “smart grid” technology, but when it needed a partner with know-how for operating a wind-to-battery storage system, it turned to Japan Wind Development Energy Co., Ltd. [TYO:2766].

Get used to it. As much as President Obama keeps warning that the U.S. must become an energy technology exporter, not importer, in nearly every alternative sector, Japanese companies stand out. So much so, in fact, that now may be the time for investors to start building a mini all-Japanese alternative energy portfolio.

To start with, there are the usual suspects – Toyota Motor Corp. (TM), Honda Motor Co. (HMC), and Nissan Motor Co. (NSANY). They are likely to be the three leaders, not just for all-electric and plug-in electric cars and trucks, but also – thanks to a lot of cozy technological cooperation coordinated by Japanese research labs – the manufacturing leaders of the advanced batteries that will go into electric vehicles. Another big time car-battery development firm worth including is GS Yuasa Corp. (GYUAF).

Another obvious candidate is Japan Steel Works Ltd. (JPSWF.PK). While not everyone thinks of nuclear power as green energy, it doesn’t gush carbon dioxide and more of it is definitely going to be needed if the world has any hope of meeting expected increases in the demand for electricity. Japan Steel Works happens to be the world’s leading manufacturer of the principal section of a nuclear reactor’s key component, its containment vessel.

Two other obvious candidates are Sharp Corp. (SHCAY) and Sanyo Electric Co. (SANYY). These well-known consumer products concerns are also heavily involved in solar power, energy efficiency and more.

While there are plenty more names to choose from, two that EnergyTechStocks.com finds interesting for their long-term potential are Meidensha Corp. [TYO:6508] and Takuma Co. Ltd. (TKUMF). Meidensha’s energy unit makes efficient power generation systems and components, while its environmental unit is engaged in waste and sewage treatment. Takuma makes, sells and operates power plants that run on biomass. It also is involved in the waste treatment business.

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